We recognise that climate change is a significant risk and complex challenge requiring action at all levels – local, state, national and international - and by all stakeholders.
We believe the financial sector has an important role to play in assisting the transition to a low-carbon economy, through both the energy we purchase directly and through financing. This transition however, needs to take place in a considered and balanced manner, supported by a stable policy environment that can underpin the transition and provide investment certainty over time.
In recognition of the role we can play in supporting the transition to a low carbon economy that limits global warming to less than 2°C, NAB has adopted three “We Mean Business” Coalition climate change commitments1. In addition, we have made further commitments that demonstrate our intention to continue to take a leadership role through how we source energy for our operations and support our customers through financing activities.
1. Undertake financing activities of AUD $70 billion over the ten years to September 2025 to help address climate change and support the transition to a low carbon economy
The Group's have made an environmental finance commitment of $70 billion by 2025 and includes:
- $35 billion to support green infrastructure, capital markets and asset finance
- $35 billion in new mortgage lending flow for 6 Star residential housing in Australia.
Our environmental financing activity includes:
- lending for green commercial buildings
- specialised lending; corporate and securitisation finance for projects that reduce emissions and assist with climate change adaptation; and lending to other low carbon businesses
- asset finance
- green term deposits
- green bonds funding
- advisory activities, underwriting or arranging
- lending for 6 Star Residential properties
Further information on how we calculate our environmental financing is outlined by category in our Environmental Financing Methodology (PDF, 329KB).
For more details about our environmental financing refer to our Environmental Products and Services and our Sustainability Report (PDF, 2.3MB).
2. Source 100% of our Australian electricity requirements from renewable energy sources by 2025
We joined the RE100 initiative in 2019 and have committed to sourcing 100% of our Group electricity from renewable sources by 2025.
Minimising the environmental impact of our business is a key focus of ours. In 2010, we became the first Australian bank to achieve Climate Active (then National Carbon Offset Standard) certified carbon neutrality and in 2020, we celebrated 10 years of carbon neutrality. We maintain this through an on-going focus on energy efficiency and other carbon reduction initiatives including:
- reducing the amount of energy we used by our equipment, lighting, heating and cooling
- installing solar panels on branches
- switching from brown coal-fired grid electricity to tri-generation and co-generation at two key sites
- purchasing offsets to neutralise remaining emissions.
Sourcing 100% of the electricity we need from renewable energy sources will continue to reduce our carbon emissions and help scale-up Australian-based low-emissions infrastructure and renewable energy generation.
3. Engage responsibly on climate policy
We will continue to engage in dialogue with key stakeholders, including customers and the wider community, to help inform how we advocate on climate policy with all levels of government. We will also ensure that our engagement on climate policy is co-ordinated and consistent and we will communicate our position, actions and outcomes annually through our CDP climate change survey response and annual report suite of documents.
4. Report climate change information through mainstream reporting channels and increase our carbon risk disclosure in half and full-year results and annual reporting, incorporating stakeholder input
Consistent with our commitment to transparency and integrated reporting, we are committed to identifying, developing and implementing ways to improve disclosure on carbon risk exposure through collaboration with other financial institutions, both in Australia and internationally. We have publicly reported on our GHG emissions since 2003. We are aligning our GHG reporting with internationally recognised climate change reporting frameworks, such as the Climate Disclosure Standards Board’s Climate Change Reporting Framework and the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). We continue to incorporate disclosure of relevant climate change related information in NAB’s Annual Financial Report and have included carbon-related disclosures in our Half and Full Year Investor Presentations since May 2015.
5. Commit to putting a price on carbon and align to the UN Global Compact’s business leadership criteria on carbon pricing
We first established an internal carbon price in 2010, as part of our commitment to achieve and maintain carbon neutrality. This has helped to drive investment in energy efficiency initiatives and helps us to achieve GHG reduction targets. We will continue to maintain the use of an internal carbon price and publicly communicate our understanding of how market mechanisms can help achieve GHG reductions. NAB will also continue to disclose, in our annual CDP climate change survey response and other relevant corporate publications, how we use our internal carbon price.
6. Set a science-based GHG emission reduction target for our operations
In 2020, we achieved an 41% reduction in emissions against our science-based emissions reduction target to reduce GHG emissions by 51% by 30 June 2025 from a 2015 baseline.
7. Commit to transparency and integrated reporting which means we are working to identify, develop and implement new ways to deliver on our commitment to carbon risk disclosure
We continue to respond to the CDP Climate Change Survey and have maintained our Climate Active Certification in Australia.
In 2019, we signed up to the UN Principles for Responsible Banking.
We will also undertake further transition risk scenario analysis on coal-related sectors which will help us map transition pathways for coal-related sectors.
8. Collective Commitment to Climate Action
NAB joined the Principles for Responsible Banking Collective Commitment to Climate Action (CCCA) in September 2019. The CCA commits NAB Group to aligning its lending portfolio to net zero carbon emissions by 2050. This will involve NAB: (a) setting targets to align our lending exposures to support the low carbon transition and the Paris Agreement and (b) developing sector-specific plans to support our clients in accelerating the low carbon transition.
As part of our actions to meet our CCCA commitment, NAB has commissioned ClimateWorks Australia to apply sector-based analysis under 2˚C and 1.5˚C scenarios to understand possible transition pathways our customers can take to a net zero emissions 2050 and the actions they may be able to undertake to get there. NAB will work closely with 100 of our largest greenhouse gas emitting customers to support them in developing or improving their low carbon transition plans by 2023.
1. Commitments 3, 4 and 5 adopt three of the CDP (formerly the Carbon Disclosure Project)-led “We Mean Business” Coalition global climate change commitments.